Deutsche Bank to buy 5% in BPL

ET BureauSep 27, 2008, 12.44am IST

BANGALORE: Deutsche Bank is set to pick up a 5% stake in TPG Nambiar family-managed BPL as the board of the company approved preferential issue of 24.5 lakh equity shares or convertible bonds or both on Friday.

The pricing of the stake buy will be decided according to the Sebi guidelines, a company official said. The company's share price closed at Rs 30.95 on Friday, down 10.03% from Thursday's closing price.

The Bangalore-headquartered company plans to use the funds to rev up healthcare equipment business and for general corporate purposes. The BPL healthcare management solutions division has been in business for over three decades and manufactures a range of products, especially advanced diagnostic equipments.

A company official said plans were also afoot to raise more capital through qualified institutional placement route, but the amount to be raised is yet to be decided. BPL, which had a leading share of India's colour television market during the 90s, was pegged on the backfoot due to financial crunch and a prolonged corporate debt restructuring exercise.

BPL CMD Ajit G Nambiar said that Deutsche Bank has been involved in the company's restructuring and that the equity investment was "a vote of confidence in the company and the promoters". With the process of implementing a 600 mw Ramagundam Thermal Power project underway once again, the company said it was working on putting its power generation business back on track. BPL, which charted an ambitious power foray in the late 90s before shelving it, said it's considering a few more projects.

Meanwhile, the company, which called off a colour television manufacturing JV with Sanyo, said it was reviewing the business plan in the context of changed market dynamics. A definite roadmap for the television, which used to be the core business, is expected to be unfurled in the coming weeks. BPL's other businesses include household products and mobile handsets.